Dear Reader,
The regulatory environment across the globe in 2022 is as dynamic as any time in the last decade. As we cautiously inch towards the return of social norms, regulators are looking to recalibrate some of the rules that were put in place before the pandemic, address contemporary topics and harness a variety of nascent technologies.
Certainty is a scarce commodity in these unpredictable times, and new rules, revisions and changes to timelines are likely to be a feature of 2022 also. Which brings us to the theme of this year’s Regulatory Field Guide: revisiting the past, managing the present and embracing the future. To help abate the uncertainty a little, we have listened to what you have told us is important and bring you this guide to light a path on your regulatory journey for 2022.
Revisiting the Past
After a period of robust debate, reflection, and consultation, this will be a year of regulatory execution of regulations revisited and those yet to be concluded. The good news is that some of the regulations following the Global Financial Crisis have stood up well to a multitude of factors including global pandemic related volatility. This means that as regulators revisit the regulatory past, they plan to make targeted revisions rather than large scale rewrites to items such as the EU’s Capital Market Union, the Alternative Investment Fund Managers Directive, European Long-Term Investment Funds, and certain securities settlement cycles.
Managing the Present
There is also a litany of contemporary issues that have surfaced which regulators must grapple with swiftly. These include workplace culture and diversity, environmental and sustainability practices, as well as complex and rapidly changing areas such as nascent technologies like cryptocurrency, artificial intelligence, machine learning, cybersecurity, cloud storage and ransomware events. This means asset managers and financial institutions should heed the global environmental, social and governance (ESG) agenda, the Securities and Exchange Commission (SEC) 2022 agenda, and ever-increasing anti-money laundering (AML) expectations.
Embracing the Future
The rapid technological shifts that have permeated all aspects of society are fundamentally also changing financial services and how it is supervised. Technology has reset customer expectations of how they are delivered, resulting in more data that is transferred more quickly to a wider array of users than ever before and using a multitude of delivery devices and platforms. This increases certain risks and introduces previously unconsidered risks and, as a result, the regulatory perimeter now discernibly reaches beyond previous physical environs and now includes cyberspace, the metaverse and whatever future digital forum financial services might be conducted upon.
The upcoming agenda also includes a plethora of ESG regulations, as asset managers and their products are viewed through a new and different prism. Non-financial measures of success are now central to how regulators view the totality of activities and practices of regulated entities. This is one of the future topics we will cover in this guide, along with cryptocurrency, and life beyond LIBOR.
BBH’s Market Intelligence Group hopes you find the insights in this guide useful as you navigate the regulatory landscape in 2022. We are leveraging our people, our expertise and new technologies to deliver client products and solutions directly related to the challenges and changes outlined within this field guide. We want this to be a conversation starter with you and our teams remain available to discuss the themes at your convenience.
Adrian Whelan
Global Head of Market Intelligence
adrian.whelan@bbh.com
